Citigroup is relaunching a dedicated real estate investment banking group in Europe – a team that has been pared back in recent years – after an increase in activity in the sector.

The US bank has named Giovanni Gregoratti and Julian Allen to co-lead the relaunched real estate and lodging group in Europe, the Middle East and Africa, according to a memo seen by Financial News. A spokesman confirmed the contents of the memo.

Citi runs a real estate and lodging investment banking team in the US but has scaled back its equivalent business in Europe in recent years. Instead, it covered the sector through its broader investment banking teams in specific countries and regions.

Investment banking fees paid by real estate companies in Emea stand at $314 million for the year-to-date, according to Dealogic, up from $239 million in the same period a year earlier and the highest YTD figure since 2007.

One senior sector banker told Financial News in May: “I do see a lot of banks looking to hire people for real estate. I think, in general, banks have been under-invested in real estate investment banking over the last five to six years, and I do see them trying to catch up.”

Citi said in its memo announcing the appointments of Gregoratti and Allen: "The European real estate and hospitality sector has recently experienced a strong and sustained increase in M&A, equity and debt deal volumes."

Gregoratti has spent more than a decade at Citi, specialising in real estate and lodging deals including the initial public offering of DAMAC Real Estate, which priced in December last year. Allen, meanwhile, will relocate to London from New York, where he has worked in the bank's real estate and lodging group since 2006.

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The duo will work closely with Wes Barnes, who leads Citi's real estate finance group in Emea, and report into Tom Flexner, global head of real estate, and Ignacio Gutiérrez-Orrantia and Wilhelm Schulz, co-heads of the newly-established Emea investment banking strategic coverage group.